The Portable was basically a PC/XT motherboard, transplanted into a Compaq-style luggable case. The system featured 256 kibibytes of memory (expandable to 640 KiB), an added CGA card connected to an internal monochrome (amber) composite monitor, and one or two half-height 5.25" 360K floppy disk drives. Unlike the Compaq Portable, which used a dual-mode monitor and special display card, IBM used a stock CGA board and a composite monitor, which had lower resolution.
It could however, display color if connected to an external monitor or television.

The Portable was not a big seller due to the public's confusion over what it really was: It should have been called the Portable XT, which would have been more accurate. "Portable PC" implied the earlier PC technology, which led consumers to believe it was less advanced than it actually was.

The floppy controller card was the same as found in the IBM XT and supported up to four 360K drives (two internal, two external) but was not compatible with the higher-capacity drives then gaining in popularity, notably the 5.25" quad-density ("1.2MB") drives that were standard in the IBM AT and 3.5" 720K drives.